Monday, October 11, 2010

Here's the notice on the Wednesday debate between Councilman Mike Lenz and challenger Tim Occhipinti:

The Hoboken Quality of Life Coalition, The Jubilee Community Center, and People for Open Government will be co-sponsoring a forum for the candidates for City Council from the 4th ward on the evening of Wednesday, October 13th. The forum will be held in the Jubilee Center located at Sixth and Jackson Streets from 7:30 – 9:30 p.m. It will also be videotaped and in the two weeks or so before the election on Nov. 2 it will air on Cablevision channel 78 and Verizon channel 47. The video will also be available online at the POG and QLC websites. We are looking into streaming the video live – we’ll provide an update as soon as possible.

This forum will give voters an opportunity to listen to the candidates and size up their positions on various issues. We encourage everyone who lives in the 4thward to attend in person or to watch the debate video.

As a realtor in town, I feel compelled to have a maniacal, analytic focus on the local market conditions. Real estate is extremely localized and each market behaves differently. Hoboken continues to do better relative to other areas. In fact, it has had the least amount of decline in the state but it is not insulated from our sluggish economy.

The Summer otherwise known as 3rd quarter was a lot slower than normal seasonality would imply. Normal seasonality would show lower volume but not to this degree. Take a look at the volume graph below. You can see the sharp decline in the areas depicting studios, 1, 2, and 3+ bedrooms. What is also telling is how the price per square foot has gone down in Q3 as compared to Q2. (Graph below from Q1 2005 to present) (see also Q4 2009 to present further below)

﻿﻿

﻿﻿

Let's look at the numbers:

Looking at 2 bedrooms sales which constitute the largest volume in terms of units sold quarter over quarter, you can see that there is a steady 7 to 7.75 % discount off of list price.

Price per square foot peaked in Q2 but then fell to below Q1 prices.

Quarter over quarter analysis - Q4 '09 thru Q3 '10

Click to enlarge

﻿

Click to enlarge

﻿

The percent change in the Price Per Square Foot from the beginning of the year is significant. You do have to keep in my the number of units sold in the comparison. Although this is the complete set of transactions i.e, not a data sample, when the numbers are low one slightly odd transaction can throw off all of the averages. I like to look at 1 and 3 bedroom sales to understand the direction of the market because, the largest volumes are in these 2 categories. Then I would compare how they did relative to each other as there are distinct markets in Hoboken for 1 Bedrooms, v. 2 Bedrooms and 3 or more. 1-4 family sales are also a market unto itself and will be reviewed in a follow up article.

Interestingly, 1 bedrooms have taken the biggest hit in comparison to 4th quarter with an 11% drop in price per square foot. I think it's fair to say that this is because of the end of the Obama $8,00 First Time Home Buyer credit. Although the program was discontinued on April 30th, as long as a buyer had a unit under contract by April 30th but closed by June 30th, he/she could still take advantage of the tax program. Net, net, Q3 was the first quarter where buyers did not have that as an option and we can see it in the drop off in price per square foot in the smaller "first time home buyer" units, i.e. the one bedrooms.
﻿﻿﻿﻿

Click to enlarge

﻿﻿﻿﻿

Percent Change in Price Per Square Foot and Duration

(Listing Date to Contract Date)

Click to enlarge

The duration of a unit on the market has generally gone down from Q4, '09. This just signals that buyers and sellers are coming together more quickly. It may be that sellers are becoming more realistic about property values and if they do sell they are more willing to recognize what their place is worth and getting to it sooner.

It's fair to say the market is slowing as we go into the Fall Season. Are buyers waiting to see what happens with employment and interest rates? As we know, mortgage and other interest rates are being held down by the Federal Reserve. Many feel this is not sustainable. What will happen to home prices if interest rates go up? Unless we have a booming economy that means that prices will go down.

In my office, we have watched a number of clients withdraw their units from the market because they could not sell at an amount that would cover their mortgage or be enough to buy that next step up. They preferred to stay put or rent if they had to move.

Business trails off starting in November and only a handful of customers start their search in December. I will take another pulse in the beginning of November to see how the Fall market is trending. The Summer however was not a day at the beach.....

See Hoboken Real Estate Monitor.com for previous quarterly analyses and other articles and resources focused on the Hoboken Real Estate Market.

The roadway collapse on upper Sinatra Drive is a reminder of another problem the city face: the Sinatra field and Gazebo closure. Although the City is working on obtaining two grants of about two million dollars, the expectation is there will be a need for an additional $10 million in order to make the necessary repairs.

Yesterday, the view from the water showed how severe the damage is and the underneath flow of water.

A view of the Sinatra Park Gazebo area yesterday afternoon.

The site of the upper Sinatra roadway collapse will be addressed but what's next? Infrastructure is an issue and this one will be paid for in part by the County and a builder but who does Hudson County come to when there's more bills to pay? Hoboken of course.

Yesterday afternoon the upper Sinatra roadway looked more ominous. More trouble is anticipated.